Spotify, Tencent step up partnership - Mobile World Live

Spotify, Tencent step up partnership

11 DEC 2017

Music app maker Spotify announced a partnership with China-based Tencent which will see the two companies acquire new shares representing minority equity stakes in each other.

In a statement the companies said the move strengthens the relationship between “the two most popular music streaming platforms in the world”. Financial details were not disclosed, but reports suggest the companies will acquire a 10 per cent stake each.

China-based Tencent holds a majority stake in subsidiary Tencent Music Entertainment Group (TME) and both Tencent and TME will hold minority stakes in Spotify as part of the agreement, while Spotify will hold a minority stake in TME.

The announcement was somewhat overshadowed by news Apple is acquiring music recognition app Shazam for a reported $400 million, as the iPhone maker beefs up its Apple Music platform in its bid to rival Spotify and Google Music. Shazam’s acquisition is also likely to affect Spotify directly, as Shazam users can currently be referred to Spotify to purchase content.

Tencent, which operates the largest social media platform in China, said it “has a proven record of investing in innovative technology companies”. The company added the TME was an early mover in authorised digital music, and provides a large catalogue of music services to hundreds of millions of users.

Spotify’s co-founder and CEO Daniel Ek added the Tencent transaction “will allow both companies to benefit from the global growth of music streaming”.

The partnership also comes ahead of a Spotify IPO widely expected to be held in 2018.

Tencent was reportedly interested in acquiring Spotify, but its advances were spurned.

Richard Windsor, founder of research blog Radio Free Mobile believes a close collaboration between Spotify and Tencent “could mean a fully global offering”, with the notable exception of India.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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